USD/MXN drops more than 2% from daily highs

Emerging market currencies recover momentum during US session.
US Dollar approached 20.00 before pulling back sharply to 19.55.

Matías Salord FXStreet

The Mexican peso rose sharply during the American session on the back of a retreat of the US dollar against Emerging Market currencies and also after Mexican data.

The USD/MXN pair approached earlier today to the 20.00 area. It peaked at 19.99 and then turned to the downside, falling more than 2% from daily highs. It bottomed recently at 19.54, the lowest since last Thursday.

Latin American currencies opened in negative but managed to erase losses. The Turkish Lira is now up for the day against the US dollar following a rate hike. It recovered from record lows levels and helped to improve the tone around EM.

Regarding NAFTA, US and Mexican senior officials are in Washington, negotiating auto-production rules. On the data front, GDP on Mexico expanded 1.1% during the first quarter, at the highest rate since Q3 2016.

USD/MXN levels to watch

To the downside, immediate support is seen at the 19.50 barrier and below the next is 19.30 followed by 19.15. On the upside, resistance levels might be, again, 19.70, 19.90 and the key 20.00 area. A break above 20.00 could trigger more USD gains and could also create concerns among Mexican officials.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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